Drivers around the world are rejoicing as oil extends its recent drop today. After pausing just above the $50.00 level for the early part of this week, West Texas Intermediate crude oil broke down to a new 3-month low on the back of a surprise build in oil inventories yesterday.
Crude oil prices have been in a selling mode for most of this week on a combination of the evolving situation in Greece, a sell-off in Chinese equities and the growing possibility of an Iranian nuclear deal. All three areas can potentially lead to the current oversupply of oil growing even further.
Crude oil prices are continuing the rally with the spot WTI contract currently breaching the three-week old technical range resistance level. This morning OPEC released their monthly oil assessment. They kept global oil demand the same as in last month’s forecast and said they do not see an increase in demand for OPEC crude.
Oil prices jumped more than $1 a barrel on Tuesday, pushing North Sea Brent and U.S. light crude to 2015 highs, after protests stopped crude flows to the eastern Libyan oil port of Zueitina, hampering exports.
After moving sideways for several trading sessions the crude oil complex made a turn to the downside yesterday and continues on the defensive so far this morning. Since the uptrend started in mid-March the spot WTI contract has increased by about $13 per barrel before stabilizing and then turning lower.